Top Ten Developments in Employment Law for HR Professionals in Virginia — #9

The top ten developments in employment law for HR professionals in Virginia for 2009 continues, in no particular order. Number 9: Labor-Related Stimulus Legislation and Regulations. More after the break. With the passage of the American Recovery and Reinvestment Act of 2009 (better known as the Stimulus Plan), the labor market has encountered various changes. Here […]

The top ten developments in employment law for HR professionals in Virginia for 2009 continues, in no particular order. Number 9: Labor-Related Stimulus Legislation and Regulations. More after the break.

With the passage of the American Recovery and Reinvestment Act of 2009 (better known as the Stimulus Plan), the labor market has encountered various changes. Here are a few highlights:

a. Application of Davis-Bacon Act Standards to Federally-Funded Construction Work: Federal agencies that contract for construction work using stimulus funds (whether in whole or in part) must do so in accordance with Davis-Bacon Act labor standards and wage requirements. The Davis-Bacon Act requires that federal construction contracts over $2000 contain a minimum wage provision for “all mechanics and laborers employed directly upon the site of the work.” The applicable minimum wage is the prevailing wage for the classes of laborers and mechanics that are employed on projects of a similar character to that of the contract work in the locality where it is performed. In addition, the applicable wage determination must be attached to the contract.

b. Executive Order Promotes Use of Union Contractors: President Obama issued Executive Order 13502 to promote the use of Project Labor Agreements on construction projects funded with over $25 million in government funds. Project Labor Agreements refer to pre-hire collective bargaining agreements with a labor organization. These agreements set forth the terms and conditions of employment for the project, including a requirement that contractors unionize themselves and their employees before being awarded the contract.

c. Changes to COBRA: The Consolidated Omnibus Budget Reconciliation Act (or “COBRA”) was enacted to provide health care coverage for a period of up to 18 months to employees who leave their employer either voluntarily or involuntarily. COBRA applies to private employers with 20 or more employees, so long as the employer offers a health care plan. Under the Stimulus Plan, employees who have been involuntarily terminated between September 1, 2008 and December 31, 2009, and who have an adjusted gross income of $125,000 or less ($250,000 for couples filing jointly), receive a 65% subsidy of their COBRA premiums for a period of 9 months starting in March 2009. This 9 month period does not extend the 18 month maximum coverage period under COBRA. The subsidies will be paid directly to COBRA administrators through a refundable tax credit. Employers may be required to demonstrate that certain terminations were involuntary and provide information regarding coverage levels before they receive the credit. The subsidies terminate if the employee enrolls in a new health or flexible spending account plan (except for exclusive dental, vision, or counseling services plans), becomes eligible for Medicare, or is entitled to employer on-site medical treatment. Employees are responsible for notifying employers of anything that would disqualify them from receiving the subsidy, or else be subject to penalties.

d. New Whistleblower Protections: The McCaskill amendment to the Stimulus Plan expands the scope of whistleblower protection to employees of private contractors and state and local governments who receive stimulus funds from the federal government. The amendment is in addition to, and not intended to preempt or limit, any state whistleblower statutes. Under the amendment, employers are prohibited from retaliating against employees who make certain disclosures concerning stimulus funds. To receive whistleblower protection, the disclosure must be made to the Recovery Accountability and Transparency Board, an inspector general, the Comptroller General, a member of Congress, a state or federal regulatory or law enforcement agency, a person with supervisory authority over the employee, a court or grand jury, or the head of a federal agency. Further, the disclosure must concern either gross mismanagement of an agency contract or grant related to stimulus funds, gross waste of stimulus funds, substantial and specific public health or safety danger related to the use or implementation of stimulus funds, abuse of authority related to the use or implementation of stimulus funds, or the violation of a law, rule, or regulation of an agency contract or grant related to stimulus funds. In addition, the employee must have a “reasonable belief” that the disclosure provides evidence of a covered issue and show that the disclosure was a “contributing factor” in the alleged retaliation. The employee may be entitled to compensatory damages, back pay, reinstatement, and attorneys’ fees. An employee’s rights and remedies under the amendment cannot be waived through any employment agreement or policy, including an arbitration agreement (unless it is part of a collective bargaining agreement). Further, employers receiving stimulus funds are required to post a notice of employees’ rights and remedies under the amendment.

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